An MSNBC article this week discussed how women are increasingly earning more than their husbands. Twenty years ago, 17.8% of women outearned their husbands. In 2007, 25.9% outearned their husbands if they both worked and 33.5% of married women outearned their husbands period. It’s estimated that the percentage bas probably jumped because of all the jobs lost in the recession, it’s estimated that nearly 75% were held by men.

The Shriver Report conducted a survey and found that 65.3% of women and 61.2% of men were comfortable with women earning more than men. I want to know, what do you think?

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Every year about this time, when the Bureau of Labor Statistics (BLS) releases inflation data, specifically the CPI-U, experts from a variety of magazines and newspapers try to predict what the tax brackets will be the following year. This is possible because many figures in the tax laws are based on inflation, such as the standard deduction, contribution limits for Traditional and Roth IRAs, and the size and placing of the tax brackets themselves.

This year, the Tax Foundation is first out the gate with their prediction that everything will essentially remain the same as inflation was a mere 0.19%. When they performed this exercise in predicting the 2009 federal income tax brackets, they were 100% correct. I’m fairly confident that these numbers will be accurate when the IRS officially announces the tax brackets for 2010.

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It’s September 15th, do you know where your tax return is? (please laugh or it’ll be uncomfortably quiet in here)

If you filed your taxes on April 15th, you can ignore this post. If you requested a tax filing extension, let this be a reminder that your tax return will be due in exactly one month. October 15th is the tax return filing deadline for people who requested and were approved for a tax filing extension.

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April 15th is only a couple weeks away! If you haven’t filed yet and don’t think you’ll make the April 15th deadline, all you need to do to procrastinated another six months is fill out IRS Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. You don’t have to provide a reason unless the IRS denies your request, which they don’t do very often (at least from what I hear), and you can file your return anytime before October 15th, the new deadline for those approved for an extension.

The only gotcha is that you are still required to pay taxes owed. The extension is only for filing your return, not for payment. If you owe taxes and can’t pay, start the process of setting up an IRS payment plan today because the extension won’t help you.

If you’re supposed to get a refund, I recommend that you file ASAP so you can get your money back!

In the last few weeks I’ve several email and IM conversations with readers who owe tax this year and are concerned they will be penalized for it. In the case of one reader, TurboTax told them they owed a $120 penalty when they didn’t, because he never told the software that he filed last year and didn’t owe any tax.

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Hardly a week goes by when someone doesn’t discover my page on IRS tax brackets and leaves a comment about how there is no law requiring us to pay income taxes. Every once and a while, you hear a story about someone refusing to pay their taxes and getting locked up and penalized for it. Case in point, just last month a couple in New York were convicted, between them, of seven felony counts (5 counts of tax evasion and 2 counts of conspiring to defraud the government).

You are legally required to pay income tax. To argue otherwise is at best a political statement (which I think is fine, it’s our First Amendment right) and at worst a one way trip to the slammer.

Want to know which law requires it? Read on.

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E-filing stands for electronic filing and is an option the IRS offers for those who want to skip paper tax returns and go electronic. There are many benefits to e-filing your taxes, ten of which I’ll list below, but there are still a lot of people who don’t e-file for reasons I’m not completely sure I understand. I know a lot of filers simply aren’t familiar with the system and are used to filing a paper return; I completely understand their reservations. I didn’t trust electronic billpay for the longest time and I’m 28, not someone who had been mailing checks to pay for bills for twenty years.

For those on the fence, wondering if you should e-file, here are ten good reasons why you should:

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This is the first edition of our Personal Finance Foundation Series where I discuss the very basics of foundation-type personal finance topics. The topic of this post is Banking.

I was fortunate that my first real experience with banking was with a local credit union. Credit unions are really great about welcoming new members and educating them about everything. Commercials banks, while still cordial, simply don’t offer the same types of services that credit unions do. My mom and I opened a joint banking account a local credit union when I was fourteen and I was excited to even have a laminated blue card with my account number and credit union phone numbers! I still have the card in my desk drawer, I still have the account open, and it was a nice warm and welcoming introduction to the banking world.

That, however, seems to be atypical. Many people are introduced to the banking world either through the nastiness of credit cards or by walking into the antiseptic branch of a major bank. You open an account, direct deposit your paycheck, and feel like a number in a database. There is no education, no explanation, just an assumption that “you’ll figure it out eventually.” Well, unfortunately that isn’t enough because “figuring it out” usually results in you being dinged on fees so let’s start from the basics and go through what banking is.

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There’s a report out this week about the IRS offering a leniency program for people who have paid their taxes on time and in full in the past but find themselves in a financial bind this year. While the details aren’t clear, it sounds like they will simply be more willing to work with people on repayment plans as people face a myriad of problems like job loss or a reduction in income.

“We need to recognize that it’s an extraordinary, challenging time,” Shulman said in an interview. “We need to understand the taxpayers’ perspective. We need to walk a mile in their shoes.”

I’ve been fortunate enough to have worked, and paid taxes, in a time of great prosperity so I don’t know if the IRS has done this in the past but I applaud them for it. This type of flexibility and pragmatism is not something I associate with the government, let alone an organization often viewed as draconian. Even Ellis Reemer, head of tax litigation at law firm DLA Pipe, cited in the article, thought this program was extraordinary.

What if you can’t pay? Here’s what the IRS says:

Don’t panic. If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. In some cases, the agency may be able to waive penalties. However, the agency is unable to waive interest charges which accrue on unpaid tax bills.

So pay what you can, then call to see what you can do. In fact, if you think you can’t pay in full come April 15th, call them today.

Source: IRS agents soften heart for delinquent taxpayers [AP]

Are prizes, lottery, and sweepstakes winnings taxed at some especially high rate by the IRS? For the longest time, I’ve had friend tell me that winning prizes and contests, while great, are often a mixed bag because of the taxes you have to pay – around 50% of the value of the prize. I’ve always believed them because I’ve never won anything, so I never had any reason to question it. Well as luck would have it, I won the lottery the other day! The surprising part about winning the lottery was that I had no idea I had even entered but the Emperor of Nigeria, or rather an emissary of the Emperor, notified me via email (look at the picture they sent of part of my loot!) that I had won some ridiculous sum. So I thought I’d dig a little deeper to see how I should make plans for my taxes next year.

Prize winnings are taxed at your regular marginal tax rate (the IRS tax bracket you are in). They’re not taxed at some special sweepstakes rate or anything like that, they’re taxed as income and reported on Line 21 (Other Income) of your Form 1040. Other sources of income that get reported there are gambling winnings, jury duty fees, etc.

So why do people believe you’re taxed at 50%? The winnings are considered income and if you win something substantial, chances are you’ll be put into a much higher tax bracket. As of 2008, the highest tax bracket starts at $357,700 and is 35%. When you start adding in state and local taxes, you could very well get close to 50%. If the prize is smaller, you probably won’t be taxed at 50%.

Another wrinkle is that the organization or company doing the giving will have to report the prize on a 1099 form that is filed with the IRS. If you think back to any contests or giveaways, the prizes often have a valuation listed (X prize is valued at ‘$5,000′). One problem that people run into is that the valuation is wildly inaccurate, this is very common in the case of vacations or big-ticket items (it’s as if every television is purchased from the most expensive place possible!).

There are a few solutions to this:

• Keep the prize and then argue with the IRS about it (which means filing a form to amend an incorrect 1099),
• Sell the prize so you have some cash to pay the taxes,
• Request cash instead (again, so you can have cash to pay the taxes),
• Get lucky and have the giving organization pay your taxes for you (a lot of places are savvy to this now and give enough money to cover taxes as if you were in the 15% tax bracket).

So, if you win the lottery, you’re OK; if you win a prize, you might have some work ahead of you. Now, if you’ll excuse me, I have to send that Emperor of Nigeria about five thousand bucks to cover the shipping fees on my lottery winnings!

(Photo: bullionvault)